Staffing companies seek reimbursement of part of maternity leave wages

The Maternity (Amendment) Act, 2017 proposed seven weeks’ wages to be reimbursed by the Government of India to employers who employ women workers and provide maternity leave benefits for 26 weeks.

Staffing organisations have sought reimbursement of 13 weeks’ wages from the 26-week paid maternity leave and removal of the wage ceiling to cover all women workers. These staffing agencies are of the opinion that the Government can use funds from the Employee State Insurance Corporation (ESIC) for the purpose.

The Government had restricted this reimbursement for just a small section of women employees whose income is less than Rs 15,000 per month and who have been members of EPFO for a minimum of 12 months, and who are not covered under ESIC.

The companies admit that the increase of paid maternity leave to 26 weeks is a huge financial burden on the employers. It also acts as a deterrent to future hiring of women.

They feel that it is necessary for the Government to share part of the burden of leave benefits (13 weeks’ wages) so that employers are not discouraged to hire more women.

Another demand put forward by the staffing companies is that the Act should cover women who earn more than Rs 15000 per month; that the limit of Rs 15000/- is too less, and will lead to many women being excluded from the benefits. Also, in sectors, such as IT, pharmaceuticals, and so on, women earn way higher incomes, and if this limit is not increased, employers in these sectors will have too big a burden to bear.

The staffing companies suggest that the Government use the ESIC corpus fund of over Rs 73000 crore that has accumulated, to share the burden of employers. Given the fact that only 21 per cent of the workforce comprises women, of which those in the child-bearing age would be even lesser, this should not be too difficult for the Government.

The companies propose that the Government simplify the formalities required to avail the benefits in addition to providing more benefits as per the Maternity Benefit (Amendment) Act to allow eligible employees to access the same at affordable costs.

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